KKR Credit Income Fund reported a $7.1 million operating profit for the half-year ending December 2025, down sharply from last year, while reinstating its Distribution Reinvestment Plan and maintaining steady monthly distributions.
- Half-year operating profit declined to $7.1 million from $34.2 million
- Total investment income impacted by $37.3 million net unrealised losses
- Monthly distributions steady at 1.67 cents per unit
- Distribution Reinvestment Plan reinstated from July 2025
- Net tangible assets per unit decreased slightly to $2.3734
Performance Overview
KKR Credit Income Fund (ASX: KKC) has released its interim results for the half-year ended 31 December 2025, revealing a significant contraction in operating profit to $7.1 million, down from $34.2 million in the prior corresponding period. This decline reflects a challenging investment environment marked by substantial unrealised losses on the Fund’s portfolio.
The Fund’s total investment income for the period was $12.1 million, which included $39.6 million in investment income but was offset by net unrealised losses on investments of $37.3 million and net realised losses on forward currency contracts of $2.6 million. These figures underscore the volatility in credit markets and currency fluctuations impacting returns.
Distributions and Reinvestment Plan
Despite the profit downturn, KKR Credit Income Fund maintained its monthly distribution rate at 1.67 cents per unit, consistent with the previous year. The Fund also reinstated its Distribution Reinvestment Plan (DRP) effective July 2025 after a suspension during the prior financial year. The DRP offers eligible unitholders the option to reinvest distributions, with units priced based on prevailing market conditions, either through on-market purchases or new unit issuances at net asset value.
Net Tangible Assets and Investment Portfolio
Net tangible assets (NTA) per unit declined modestly to $2.3734 as at 31 December 2025, compared to $2.4716 a year earlier. The Fund’s portfolio remains concentrated in KKR-managed credit investments, including the Access Fund PPN, KKR Lending Partners Europe II (Euro) Unlevered SCSp, and KKR Lending Partners Europe III (Euro) SCSp. These investments are valued at fair value, reflecting market conditions and underlying asset performance.
Governance and Operational Notes
During the half-year, there was a change in the Fund’s board with the resignation of Director Vicki Riggio and the appointment of David Manoukian in November 2025. The Fund continues to operate as a going concern with no significant changes in its state of affairs or contingent liabilities reported. The independent auditor, Deloitte Touche Tohmatsu, provided a clean review opinion on the interim financial statements.
Looking Ahead
KKR Credit Income Fund remains focused on its investment objectives of delivering income and long-term capital appreciation through diversified credit investments. However, the recent unrealised losses highlight the sensitivity of credit assets to market volatility and currency movements. Investors will be watching closely how the Fund navigates these headwinds in the coming periods.
Bottom Line?
KKR Credit Income Fund’s interim results reflect market pressures but a steady income stream and reinstated DRP signal resilience ahead.
Questions in the middle?
- How will ongoing market volatility affect unrealised gains and future distributions?
- What impact will currency fluctuations have on the Fund’s European credit investments?
- Will the reinstated DRP influence unit liquidity and investor participation going forward?